Essay Example on Foreign Aid in Developing Countries

China is likely to make brunt for North Korea's economic and social repercussions in an account of the war. The movement of the North Koreans towards China and the opposite movement of the people from China to Northern parts will lead to excessive utilization of China's resources will then lead to economic instability (Xu & Bajoria 2014). The available funds will be scarce and this will in return forces China to seek foreign aid.

The US has close economic ties with China that see US consuming up to 18% of Chinese goods (Wolf, 2015). In the event of war, between the US and North Korea, China will be at the receiving end losing consumers of its goods, and thus export sector will experience contraction.

There are possibilities that economic situation will be worse resulting from the possible war between the US and North Korea. China being an ally of the two countries will suffer a great deal. As this crisis grows, China will face an economic setback (Xu & Bajoria 2014). War, therefore, will affect the foreign demand, investment, and declines domestic consumer's confidence. This in return results in increased government expenditure at national and local levels as well as decreased production.

Conclusively, both war and peace have a significant role in the distribution of foreign aid in developing countries. The conflict between the US and North Korea might result to wiping off a large percentage of its population, and this will directly affect China due to refugee crisis that will see China's hospitals, and other social services filled overwhelmingly (Wolf, 2015). This will change the economy of the country and force it to seek foreign aid. The presence of peace results in immerse development and economic growth.

Reference

Diehl, P. F. (2016). Exploring peace: Looking beyond war and negative peace. International Studies Quarterly, 60(1), 1-10.

Kitano, N., & Harada, Y. (2016). Estimating China's foreign aid 20012013. Journal of International Development, 28(7), 1050-1074.

Nwaogu, U. G., & Ryan, M. J. (2015). FDI, foreign aid, remittance and economic growth in developing countries. Review of Development Economics, 19(1), 100-115.

Wolf, C. (2015). Foreign aid: theory and practice in southern Asia. Princeton University Press.

Xu, B., & Bajoria, J. (2014). The China-North Korea Relationship. Council on Foreign Relations. Last modified August, 22.